The U.S. Federal Reserve held interest rates unchanged, keeping its benchmark rate in a range of 3.5% to 3.75%. The decision came as the central bank continues to weigh persistent inflation against an economy that officials described as resilient, leaving the cost of borrowing for Americans stubbornly high.
Fed Chair Kevin Warsh said the economy is showing impressive resilience, with solid growth despite recent shocks. He noted that job gains have kept pace with the workforce and that the unemployment rate has changed little, pointing to what he described as a steady labor market.
At the same time, Warsh acknowledged that inflation remains elevated relative to the committee's 2% goal, citing the war in Iran and global energy instability as pressures on prices. The committee remains resolute, he said, adding that the Fed will deliver price stability.
The move was not unanimous. The Fed reached its decision in a 9-to-3 vote, with the three dissenting members voting to raise rates rather than hold them steady. That marked a shift from a recent run of unanimous decisions to keep rates on hold.
The split reflected growing expectations on Wall Street that the Fed might actually lift rates. Over the previous 48 hours, several financial institutions had judged a hike more likely, and the decision to hold instead was described as a difficult one for the committee.
Financial markets reacted negatively to the outcome. At one point during the trading day the Dow was down around 800 points, or about 1.5%. Chip stocks and semiconductors, seen as central to the growth of artificial intelligence, had already been under heavy pressure, falling roughly 9% over the week.
For households, the unchanged rates mean little relief on the cost of borrowing. The average 30-year fixed mortgage was around 6.76%, credit card borrowing averaged about 19.57%, and a 60-month new car loan carried a rate near 6.96%. Officials signaled that, unless the job market weakens or inflation eases, Americans can expect elevated borrowing costs for the foreseeable future.